California ISPs Support State Ruling That PUC Has Broadband Jurisdiction Over SBC and Pacific Bell.

Business/News Editors & High-Tech Writers

California is the First State to Rule That It has Authority to

Regulate DSL 

SAN FRANCISCO--(BUSINESS WIRE)--April 1, 2002

The largest state association of Internet service providers in the United States today announced its support for a ruling issued on March 28 by the California Public Utilities Commission (CPUC) that the state of California has the authority to regulate DSL-based Internet services provided by SBC Communications and Pacific Bell. The CPUC's judgement was the first time a state has unequivocally taken jurisdiction over the delivery of broadband Internet services provided by local telephone companies.

"This is a victory for consumers, small business and the Internet as a whole," said Jim Pickrell, president of the California Internet Service Providers Association (CISPA) and owner of BrandX Internet, an independent ISP. "By asserting its right to protect the businesses and citizens of the largest state, the California PUC has sent a message to Washington, D.C. that states will not sit still while local phone companies manipulate their control of the public phone networks to establish a DSL monopoly for their own Internet subsidiaries. By rejecting SBC's attempt to destroy traditional public-spirited oversight, the California PUC continues its leadership role in bringing the benefits of competition to public services."

On Oct. 23, 2001, SBC Communications filed a motion claiming that the California PUC had no jurisdiction over SBC's DSL services in California. The motion was filed despite the fact that SBC had previously acknowledged the CPUC's jurisdiction over DSL services in SBC's 1998 application for state approval to provide DSL services in California. On Nov. 6, CISPA filed its own motion asserting the CPUC's authority to regulate broadband services.

"The federal Telecommunications Act of 1996 and California state law support the authority of the California PUC to regulate telecommunications and Internet services provided in California," said David Simpson, CISPA's founder and a partner at MBV Law LLP, a San Francisco-based law firm representing CISPA. "The CPUC has now reaffirmed its jurisdiction and asserted its authority to temper SBC's virtual monopoly of broadband Internet services over public telephone lines."

Background on CISPA vs. SBC Communications

CISPA's original complaint to the California PUC against SBC and Pacific Bell -- filed on July 26, 2001 -- seeks to ensure a truly competitive market in providing high-speed Internet services to California consumers and small businesses. The CISPA complaint outlined policies, anti-competitive conduct and contract terms that it says give an unfair advantage to Pacific Bell Internet and related companies owned by its parent, SBC Communications.

SBC has also asked the California PUC to allow it to enter the state's $17 billion long distance market. To get approval, SBC has to prove that SBC's control over California's telephone facilities properly supports competition among Internet service providers, including independent ISPs. CISPA's original complaint claims that SBC has failed to provide fair and non-discriminatory access to the phone networks.

"SBC's discriminatory practices have all but eliminated competition in the DSL market," said Mike Jackman, executive director of CISPA. "Independent ISPs have been forced to provide DSL to their customers at a loss and SBC now controls more than 90 percent of the market. What's ultimately at stake here is not just competition in broadband access, but whether Internet users will have a choice in the content and applications that will become available in the future."

About CISPA

The California Internet Service Providers Association, Inc. (www.cispa.org), the largest state ISP association, provides California ISPs and their customers with a unified voice to address legislative, regulatory and consumer issues as well as to support innovation within the ISP industry. CISPA works to ensure that all of California's ISPs receive fair and non-discriminatory access to the networks of incumbent telephone companies and other carriers of Internet traffic, including cable systems. This includes reasonably priced and non-discriminatory access to DSL connectivity.